Mozambique: Economic climate still unfavourable at start of second half

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Mozambique: Economic climate still unfavourable at start of second half

11:42 CAT | 27 Sep 2017

O País / Compared to the previous month, the economic climate declined in July

The Mozambican economy (ICEE) fell back in July compared to the previous month, according to the National Statistics Institute (INE), with the Climate Index revealing pessimism among businesspeople regarding stability in the short term.

The slowdown is mainly the result of a decline in employment prospects in an environment characterised by high demand prospects, favoured by a reduction in the general price level.

The decline in the economic climate breaks a three-month run of favourable assessments.

The June Economic Climate Index for the hotel and similar services sectors improved, as did commerce (for the third consecutive month) and the transport sector.

Demand continued to improve

The demand indicator (business sector expectations in relation to demand) continued to grow for the fifth consecutive month in July, due to positive evaluations in the transport, trade, housing and catering and construction sectors, while the industrial production and other non-financial services sectors showed declining confidence.

The employment outlook indicator continued to decline for the second consecutive month, as a result of unfavourable assessments in all survey target sectors except construction and trade.

The employment outlook indicator expresses qualitative business optimism about employment in the short term horizon.

The price outlook indicator also slowed in July in line with the consumer price index, which decreased by 0.5 percentage points. The decline in expected prices was due to the decrease in the forecast of economic operators in the industrial and commercial sectors despite the upward trend in housing, catering and similar sectors, as well as construction and other non-financial services as well such as transport and storage.

Importance of economic surveys

Economic surveys are instruments for analysing and interpreting the evolution of economic activity in the short term. They aim to enrich analysis of the internal environment, with regard to the real sector, and make decision-making more accurate and timeous.

The questions of this type of survey are qualitative, reflecting the opinions of entrepreneurs about the general situation of their companies, the behaviour of significant variables in the present and their perspective on the immediate future.

The information is compiled on the basis of a monthly business survey of companies in the non-financial sector carried out by the INE with a view to assessing the behaviour of the economy in order to provide users with information for the management and monitoring of economic policy.

Source: O País